Friday, September 25, 2009

These are not the droids you are looking for

As the funnies during the G20 continues (I cannot be the only one hearing the Imperial March playing in my head) I detected some more evidence, in addition to all those already covered, of the US economy about to go crash and smash. Well, I’m not the only one seeing these, others have picked some of it out and displayed them, but put it all together and the result cannot be mistaken.

While the ratio between debt and GDP in the US continues to expand i.e. leading to a debt-spiral with less and less wealth to pay for loans (higher risk for defaulting and such), the Shared National Credit Program in the US is now reporting that: Classified assets rated 'substandard', 'doubtful', and 'loss,' rose to $447 billion from $163 billion in 2008. The volume of SNCs rated 'doubtful' and 'loss' in 2009 rose almost 14-fold to $110 billion, while non-accrual loans touched $172 billion, up from $22 billion in 2008. The report also said foreign banks held about 38 percent of the $2.9 trillion in loans, while hedge funds, pension funds, insurance companies and other entities held about 21 percent. (Reuters)

Almost all this money is consequently just puffs of air and as a result it will evaporate in the near future. Oh, you think this is bad? Wait, it gets better.

The US Census Bureau is telling us that new orders for manufactured durable goods in August decreased $4.0 billion or 2.4 percent to $164.4 billion. This was the second decrease in the last three months. This followed a 4.8 percent July increase.

Notice the last sentence? Not long ago our enemies quoted that “positive” report and told us it was a “green shoot”, I said then it was a fictional idiocy, and as usual I was right.

I could go on about the report (find it here), lots of fun things, but I want you to notice another funny little thing. The only positive numbers change from 08 to 09 in the entire report is this:

Defense capital goods:
Shipments………………………….. 14.8%
New Orders………………………… 3.1%

With non-defense new order series decreasing 7.1% in August, (collapsible figures) Der Grandiose organizer, Barack Obama, seems like a very peaceful president, don’t you think?

Oh, it doesn’t stop here either.

The Fed has accounted for half of all Treasury purchases in Q2, and with almost zero left to play around with, so one need to stop and wonder what they will do when no one buys during the next auction.

And the fiscal year is close to its end with millions of Americans about to lose their benefits while unemployment continues upwards. The real unemployment figures are now close to 20%, although our enemies want you to think 9.7%.

The only question now is when this sand-castle will get crushed by the depression tsunami. And then the follow-up question, how will this affect the rest of us? Well, you figure it out for yourself. I’m long into my plans of moving to deserted island growing my own crops, which might give you one indicator...

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